Transmission and Distribution Utility Charges, also known as Texas TDU Delivery Charges, impact your monthly electric bill. Delivery rates change every March (usually down) and every September (usually up).
You may open up your electricity bill and notice new line items, or a different charge compared to the prior month. Most of the time, it’s small changes in the delivery rates, but these can add up. There’s no way to avoid these changes, but it helps if you understand what’s going on.
What are the Current Texas TDU Delivery Charges?
Looking for Oncor Delivery Charges or Centerpoint Delivery Charges? Below are the current monthly TDU Delivery Charges for all 5 of the deregulated Texas markets. (Current as of 6/1/2020)
|Utility Delivery Company||Monthly Charge||Charges per kWh|
|AEP TX Central||$4.27||4.4408¢|
|AEP TX North||$3.57||2.8043¢|
As of April 1, 2020, the Public Utility Commission of Texas (PUCT) approved the Texas COVID-19 Electricity Relief Program. Every Texas residential and business customer in the deregulated electricity market will pay for this relief program. A new delivery charge, or tariff, was approved by the PUCT of $.00033/kWh. For a customer using 1200 kWh a month, the increase amounts to 40¢ per month. You will see an additional line item on your electricity bill for this new tariff, or your electricity provider may add the new tariff to the existing utility delivery charges per kWh.
What are TDU Delivery Charges?
TDU delivery charges pay for the maintenance of the poles and wires that deliver electricity to your home and for the meters that measure it. The TDU delivery rates are regulated. Any changes to the TDU delivery rates must be approved by the Public Utility Commission of Texas (PUCT).
These delivery rates are passed through to the customer without markup. They are included in your bill from your retail electricity provider (REP).
These TDU delivery charges may show as a line item on your bill, or may be “bundled” in with an energy rate.
The TDU delivery areas in Texas that participate in deregulation are: Oncor, CenterPoint, AEP Texas Central, AEP Texas North, and Texas-New Mexico Power (TNMP).
I Thought I Had a Fixed Rate? Why Will I Be Impacted?
This is a common complaint of residential electricity customers in Texas — “I signed up for a fixed rate, and then it changed!”
Here’s the real deal.
Whether you have a “bundled rate” (one rate for both energy and delivery) or an “unbundled rate” (a fixed rate for energy plus delivery rates passed through at cost), when the delivery rate changes, the overall price you pay for electricity will change.
Most of the confusion is over bundled rates.
The fine print on the electricity facts label usually says something like this:
“The price you pay each month will reflect the transmission and distribution utility TDU Delivery Charges in effect for your monthly billing cycle.”
Or it may include something like this:
“**TDU Delivery Charges are subject to change.”
In English: When the TDU Delivery Charge changes, your price will change.
If you have a bundled rate, you will typically see a new line item on your bill when delivery charges change, with a description like “Centerpoint Energy Additional XXXX Charge.”
If you have an unbundled rate, the delivery rate per kilowatt hour will simply change on your bill, with no additional line items.
When Do TDU Delivery Rates Change?
TDU delivery rates change officially twice a year — March 1 and September 1.
The Public Utility Commission of Texas (PUCT) must approve TDU delivery charges.
Just know that if delivery rate changes occur and they impact your bill, your supplier can provide the details of the change.
Why Do TDU Charges Change?
Each of the regulated utility companies is entitled to collect 100% of their costs from their rate payers, and receive a guaranteed rate of return. That’s because they provide a critical public service: delivering electricity, maintaining the infrastructure, and responding in case of an emergency.
The Public Utility Commission of Texas reviews and approves each utility’s rate case.
The items in each rate case may include costs from hurricane or storm recovery, upgraded service equipment, or bond issues and financing costs for system upgrades.
What Makes Up the TDU Delivery Charges?
There are multiple components included in the TDU delivery charges, with fascinating names like
- Energy Efficiency Cost Recovery Factor (EECRF)
- Transmission Cost Recovery Factor (Rider TCRF)
- Accumulated Deferred Federal Income Tax (ADFIT) Credit
- Transition Charges (Schedule TC2, TC3, SRC, and TC5)
Most REPs summarize these TDU delivery charges on your monthly electric bills. You will not see this level of detail on your monthly residential bill.
The PUCT maintains official copies of the tariff documents on their web site. These tariff documents are 200+ pages long and are a proven cure for insomnia. Give ’em a read!
Lock in Your Energy Rate
While you can’t control the delivery rates on your bill, you have the power to choose your electricity supplier. You can control the price you pay for every kilowatt hour of electricity.
We created ElectricityPlans to help consumers make sense of their electricity bill. We only work with reputable providers. And, our staff carefully reviews the fine print on each plan. Plus, if you need more help, we can shop for you with our free PlanScan feature.